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Things to Know About the USDA Home Loan

What is a USDA home loan?

The USDA home loan is a mortgage loan that is offered to those who want to purchase a rural home in America. USDA loans are insured and certified by the U.S. Department of Agriculture in order to increase the rapid development of rural areas across the nation. If you want to purchase a home or a private property with no mortgage insurance or a down payments, this program will best suit your needs.

Types

There are two types of USDA home loans: The USDA Guaranteed Rural Housing Program and the USDA Direct Rural Housing Program. The USDA Guaranteed Rural Housing program loans are granted to people who have higher incomes whereas the USDA Direct Rural Housing Programs are loaned to those having moderate to low income.

Eligibility

For you to be approved for this mortgage loan program, there are some requirements. Your monthly mortgage payment must not exceed a particular percentage of your total monthly income. This percent will depend on where the USDA loan has been offered to you. Another requirement is that you must purchase a home in one of the rural areas in America. There are eligible rural areas nationwide, including in New Jersey, California, and the Midwest.

Benefits

The USDA loan offers great features:

1) The loans are offered at very low interest rates

2) The loans have no down payment requirements. This is unlike most other mortgage loan programs.

3) You will be ensured 100% financial support if you get this type of loan program

4) A very affordable mortgage insurance fee is charged. This fee will suit your budget.

5) The repayment process for this type of loan is normal since no pre-payment penalties are charged.

6) The amount of money to be loaned is not of an exact limitation. Therefore, you can borrow any amount of money if you have met the eligibility requirements.

If you're interested in a home in the rural U.S., this is the best mortgage loan alternative for you.